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German MPs push for veto right on extra ESM payments -document

Published 04/13/2011, 05:01 AM
Updated 04/13/2011, 05:04 AM

BERLIN, April 13 (Reuters) - German lawmakers should seek the right to vote down any supplementary contributions by the country to a permanent fund being set up to bail out fiscally troubled euro zone states, a document obtained by Reuter shows.

The European Stability Mechanism (ESM) is due to come into force in 2013 with 80 billion euros in cash reserves meant to assure a triple-A rating. Germany has agreed to pay 21.7 billion of that.

The fund will also be backed 620 billion euros of guarantees, increasing the euro zone's potential firepower for dealing with future financial crises and in effect committing member states to additional contributions if required.

But following a warning from Germany's Federal Court of Auditors, members of the lower house's budget committee want any supplementary payments into the ESM to face a parliamentary vote instead of being made automatically.

"We expressly welcome the demand of the Federal Court of Auditors for a more direct involvement of parliament and will consult about this intensively when the ESM is installed," CDU parliamentary budget expert Norbert Barthle told Reuters.

Should the fund's capital base be threatened, and should a contributing country be unable to pay its share, a simple majority decision could require all others to top up their contributions, according to the audit report.

(Reporting by Thomas Atkins and Andreas Rinke; Editing by John Stonestreet)

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